ABSTRACT
In the study of strategic management, the assumed drivers of competitiveness and ultimately the economic value of the firm have historically been grounded either in traditional theories relating to market and industry structure (Porter 1980, 1985) or in more contemporary theories relating to specific capabilities of the firm — the so-called ‘resource-based view’ or RBV (Wernerfeld 1984; Barney 1991). In the RBV, firms that have resources that are rare, valuable, hard to imitate or substitute will achieve sustained competitive advantage notwithstanding changes in market and industry conditions (Grant 1991). There have been attempts to bridge these two perspectives. For example Mintzberg and co-workers have argued that all schools of strategic management have merit in different contexts (Mintzberg et al. 1998) and thus the real source of competitiveness in business lies in knowing which approach best fits the particular circumstances, and the key role of managers is to think strategically at all times (Mintzberg 1991). Nonetheless, the active debates continue between protagonists defending alternative paradigmatic assumptions about strategic management, competitiveness and the value-creation process (Priem and Butler 2001; Makadok and Coff 2002).
